The Spot / Low-Priority VM / Preemptible VM Instance Pricing Model

There are several pricing models available when building a cloud environment based on Infrastructure as a Service (IaaS):

On-Demand or Pay-As-You-Go –Customers pay for compute resources per hour or second (depending on the cloud vendor or VM type) with no upfront commitment

Reserved Instances or Committed Use Discount –Customers commit for 1 or 3-year terms with the goal to control or reduce total computing costs

Dedicated Hosts –Customers choose either on-demand or reserved instance and receive a dedicated host so that the hardware is not shared with any other customers

Spot Instances or Low-Priority VM or Pre-Emptible VM Instances –Customer can purchase VM instances at a very low price from a pool of spare compute capacity at cloud vendors’ data centers

Spot Instances Background

Public cloud vendors spend a lot of money expanding available compute resources in all of their data centers and in all regions in order to supply customers an almost infinite amount of available compute resources for consumption.

The fact that cloud vendors have extra compute capacity enables them to sell compute resources to customers at a very low price.

Common Use Cases

Stateless web services

Image rendering

Big Data analytics

Batch jobs

Containerized workloads

High Performance Computing (HPC)

Massive parallel computations

CD/CD workloads

Genomics

Financial modeling and simulations

What do you need to know when considering the Spot Instance model?

Because vendors sell compute resources from extra capacity, customers need to understand that the low priced VM might be taken at (almost) any given time. If this capacity is needed by another customer who is willing to pay extra money, there is no guarantee that the vendor will continue to offer the same terms.

AWS Spot

Each Amazon EC2 instance has a price based on trends in supply and demand in each Amazon region.

Amazon does not terminate EC2 instances that are configured with a specific duration when the spot price changes (also known as Spot blocks).

AWS offers a free tool called Spot instance advisor to assist customers determine where there is the least chance of interruption in a specific region.

In cases where customers require a specific level of capacity, Amazon’s Spot Fleet service can solve this by attempting to launch a number of Spot Instances and On-Demand Instances to meet the target capacity specified in the request. The request for Spot Instances is fulfilled if the Spot price exceeds the current Spot price and there is available capacity. The Spot Fleet service also attempts to maintain its target capacity fleet if your Spot Instances are interrupted due to a change in Spot prices or available capacity.

Before an instance is terminated, customers will receive a two-minute warning.

Eyal Estrin
Eyal Estrin is a Cloud Architect. He joined IUCC in December 2017 and his main focus is promoting and supporting cloud services in Universities in Israel. He brings with him more than 20 years of experience in the IT and information security field.
Follow him at @eyalestrin